Brock Weatherup, the CEO and Co-Founder of Metamorphosis Partners, the CEO and Founder of Pet360 acquired by PetSmart and the CEO and Co-Founder of Petcoach acquired by Petco explains how staying super focused on one field helped him in his career and also talks about his experience raising money for his companies and then selling them.
Metamorphosis Partners: https://www.metamorphosis.com/
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This is fundraising we do and today's guest speak with Brooke,
whether up CEO and Co,
founder at partners and founder of several companies that got acquired,
sixty acquired by PetSmart and pet coach acquired by pet Co.
and as you might have noticed a lot of companies that Brooke was a part of have award pads in them. So, Brooke is heavily focused on these specific fields, which is a pat industry.
I'm not quite sure how to phrase that, but basically this episode will focus a lot on staying focused in one field and where the major advantages of that.
So, let's kick it off by giving us some background on herself and on partners. Yeah. Thanks.
So much for having me, I think the exciting thing about, frankly, doing metamorphosis and creating that business was it's really combination of frankly, a whole lot of stuff before this.
So pulling together some great folks,
but also kind of my lessons learned of starting other businesses,
that all came together to say,
how do we in metamorphosis bring together a bunch of really talented people focused on an industry that we know.
and are well connected in the pet industry and could we create businesses that are that take advantage of both that knowledge of that expertise and hence metamorphosis and so far that has led us to create a content site?
That's called great. Com, we've created a pet supplement and treat and CBD for pets product company called the anxious pet.
So you can see that the anxious pet dotcom as well as we've gotten to a few other kind of errors through acquisition of acquiring small business called metropolis.
That's in the retail side of it and print that's in medical records management and a few other things. So we've been we've been busy since we started ten month to go. Oh, nice. It's a Pre young company.
Congrats on that by the way and just making sure we're on the same page metamorphosis partners is a mix of an investor and a Ventures. Do you or start to do?
Yeah, it's it's probably more of like, it's an operating company that acts like what people could understand as a venture studio. So, what I mean, by that is we are choosing to be opportunistic of things that we build ourselves.
But on the other side, you know, the, the ability for us to either acquire and kind of move forward with it. So we kinda go about it one way or the other.
But everything is a wholly owned operating entity within metamorphosis.
So, we don't, we don't invest in a true kind of we're gonna put a minority stake and another company, but it's more, you know, we will either choose to build it, or we will acquire it to get it to grow. And that's how we create our business. I got it. Okay.
That's pretty interesting approach. And we'll get back to that later, but first one to discuss focused on that specific adage, which is a pet industry why did you choose that specific fields? And why do you focusing so heavily?
And would you recommend people to be like so so so focused in the in one specific industry or would they,
would you rather see more people,
diversifying their experience basically well, you know,
before getting into the pet industry,
the fact of the matter was I and I frankly,
still defined my own experiences being in the,
in the end in that consumer business,
it's selling a product or service to a consumer,
twelve years have been independent industry prior that I did a business that I started that had that was in the sports and entertainment industry.
And before that was.
In a company called interactive core,
which included things like ticket master an Expedia city search and a whole bunch other things the consistent thing through all of those are there it's how do you leverage technology to sell a product or service and the secondary piece that's the similarity through all that
is those are three things that I personally love.
So my, my best day would be going for a hike in the woods, you know, with my, with my dog and then coming home and watching sports. And so I built a within ticket master.
I ran a division called reserve America that was in the outdoor recreation space, and then obviously fat head, which was in this space and then obviously a lot of pet. So those are three things that are are are personally of passion interested.
So, I think that's what's more important than necessarily, you know, what, what category and you have to be excited about what you want to get into an, especially as an entrepreneur. You have to believe in what you're doing.
Otherwise you're not gonna have enough energy to get through the, you know, the startup world. Right, right? That's true. That's fashion is like the key determining factor there. So good point.
But let's talk about your previous successes, which is from what I know pad three, six C acquired by PetSmart and pad coach acquired by PETCO. Was there anything else that I missed?
I think there was right those were what were kind of directly acquired, grew fat head to a pretty, pretty big scale before I left it then it's continued on to today.
And then, obviously, there's things inside. What what is the public company of InterActiveCorp but kinda those, those two specific things have kind of been a part of that.
I think one point that's also known as we talk about fundraising is when I left pet smart. And before I started at coach to keep all the pet names. Correct?
But after I left PetSmart, I spent the next kinda year ish, frankly, just being a fairly active angel investor and so wasn't really doing a quote, unquote, full time job.
But my full time job was working with entrepreneurs and working with startups across a whole bunch of different categories, all consumer focused, but was a fairly active angel investor. I kinda personally am an investor and about.
Well, twenty three different companies as an individual, so I've been, so I've been on that side of the equation also it's kind of going through all the sort of the different dynamics of fundraising.
There's there's many many aspects to it right? Speaking of fundraising. So, you've raised money for multiple companies and let's talk about that.
What's your like, the major takeaway from all those fundraisings and what would you do differently if you could go back in time and go to your very first company that's your trying to raise money for what would you do differently? There?
I think there's a couple different things,
I've raised kinda what I'll call large scale growth capital or larger scale so raised eighteen million dollars as part of pep,
sixty and a growth capital sort of scenario,
doing something like Pat coach where we created where we did,
basically seed capital at small scale and metamorphosis is somewhere in between.
And so, the thing that I've kind of learned all along right. Is, you know, you, you wanna as much as you can be specific about who you get as to be your investors. It's pretty important.
Because that matters overtime, and who they are, what they care about what their specific time horizons are, how they're, what their promises are to their, their frankly a big part, especially for getting professional money.
So, non angel or individual investments, you're getting it from professionals or anything else is you need to also pay attention to where you are in their particular fund.
And what I mean, by that is, if you're an early investment in the fund, then, you know, kind of the pressure is a little kind of less at the beginning.
But, you know, I'll be kind of hopefully one of the earliest ones to create a return and so There'll be a pressure to exit. Similarly if you're one of the later investments of an incredibly successful fun.
Honestly, the pressure is off because the fund is already returned, something meaningful to their.
And so you don't your, the pressure on the business to create a, a massive exit versus a nice exit is is different, because they've already they've already used the value of the fund.
That they've just create a return for their to raise another fund, because that's how funds need to become really close when they're on fun for fun, five and fun six. That means they are doing incredibly well. Right right. That's a good point.
You know, looking at where the fund is stage of investment cycle. That's super, very, very important. It's a good point here, but I want to get back to your company past three sixty.
You were the only founder of the, how how do we work out and, I mean, it worked out pretty well?
I can see the guy acquired and question is, how do you manage to lead the company by yourself basically with no Co, founders were you able to raise any money for it?
So, again, the, the situation with pet, three sixty was I, I originally came in and there was a business there that was called pet food, direct.
And it was failing, it was, frankly, gonna go out of business and I came in and kind of said, hey, look, could this turn into something more?
And so so that kinda we kinda completely re, master. The whole thing use some of the infrastructure of pet food direct, but we used it to really build pet three, sixty, which then included pet M. D.
which included a, a site called only natural pet, which included a pet pharmacy all these sorts of things. And, you know, that became what, what was pet? Three, sixty at the end of the day. And the value of that is, I think, you know, the.
I think there's probably two much made of CO,
founders versus founder look,
you have to be a great leader like,
whether there are six cofounders or there's one,
it doesn't really matter if you're gonna be the CEO of the business.
You've gotta be a great leader, which means, you need to find and hire exceptional people you need to motivate those individuals to do great work, you need to organize strategy. So that resources are being allocated.
Well, and you need to make sure at the end of the day that you have a well and high functioning team to achieve your goal.
Because, you know, business is succeed because of people, you know, and strategy, but you can never succeed with just strategy and not the people and so Co, founder naco found or anything else. It's kind of irrelevant.
It's just how do you put your team together? I've never made much of the founder Co, founder thing. It's something that a lot of the world makes a big deal about, but I've never made a big deal. That is actually probably, that's the first time I hear.
That's because basically everyone's say, like, yeah, CO founders basically essential. So that's that's something new. That's something completely new.
But when you were talking to investors or to potential acquires, at the end,
were they not concerned by the fact that you're the only founder of the company that's why you're mostly like,
we just have to have a CO founder because that's what investors care about a lot. Investors care about the team they don't care whether you call them. Co founders are not. That's a really good point.
I mean, fundamentally, like, you know, okay, so if metamorphosis I think if you looked at LinkedIn, we have six Co founders, because we're the six people who got together and we're here on day one in September of last year. Okay.
Does that really matter? No does it matter that those six people ours are extraordinary and exceptional individuals with terrific backgrounds? Absolutely.
Have we added now another,
twenty plus people to the team that would also have incredible backgrounds and incredible expertise,
and so no matter what it looks like at the end it's it's Here's what Here's what the team looks like and,
coach when we built that business,
when Petco acquired us,
it was entirely like oh,
Like, okay. Wait, there's you Brock. There's hey, there's David Martin. Who's an incredible product person? Oh, there's Christie long.
Dr, Christie long who is a exceptional and entrepreneurial veterinarian, which there aren't many of oh, you've got Fernando Pascoe, who is the, and has built this incredible and really efficient team in Brazil that supports what you're trying to do.
Oh, you have I mean, that's what the business not that whether I was Co founder with David or not like, it was just not really the.
That wasn't the question, but the people that came together were there, and there was never a definition of.
Being in a CO founder or not a CO founder, right? That's actually a very good point. I like that approach and probably can work. That's that's always debatable.
So we'll see how how stuff goes if people try it. Let me know how that goes. I'm curious, but go into more detail in terms of fundraising.
So, let's talk about what type of tool should you use to raise money from investors so there is convertible debt. There's convertible notes there. Price equity rounds.
There are basically all types of funding there which one is your favorite, what would you recommend to early stage founders?
When you're early stage, and the, the safe notes that were put together, I think are an incredible tool one because they don't they don't require a huge amount of effort to define value at the moment.
Obviously, you have to define what your cap is, and likely what your discount is, and any special terms.
But at the end of the day, you're able to really just be like, okay, you know, bring some money in the legal cost of doing it. It's basically negligible. It's just a, it's a really beautiful tool right?
That was put together and Y, Combinator whomever kind of put it together the beginning, but it's, it's an exceptional tool.
if you have the right investors,
and they are folks that are kind of around,
and if you can do an easy price round at the beginning,
why not if you have really sophisticated investors that's start to get into special terms or special classes of stock like,
you're gonna just you're gonna eat up so much time on legal documents and trying to understand it and it's gonna be and,
so little early on in the business that,
if you did a preferred equity round with certain kind of caps.
And interest rates and things, like, you just don't know enough about the business to whether or not that would be that's a really dumb or really smart thing, because you just haven't been at it long enough. So, I think the safe notes are are really great early on.
Right. That's why they're so D*** popular. That's reasonable. Correct. Correct. So, if someone is not familiar, with the safe note, you really shouldn't be go on just Google safe notes company.
Or just save notes is basically enough, is Google that and here we're moving on to actually using safe notes in terms of, you know, how to get to a point where you can use it to raise money. Let's talk about the X.
I mean, you've raised multiple money for multiple companies, and you've done plenty of Missy senior presentations in the way you've structured it.
What do you think were the major mistakes that you've made there during the, your those presentations or during those meetings with investors? What's where the major mistakes that you would visually try to convert.
Well, I think there's there's, I'll separate into two different sides of it. One is what is the pitch deck and then what is your commentary around the pitch deck so I'll separate. Those two things for sounds. Good.
So, the, the, the specifically to the pitch deck is what I would say is, like, and I think I've yet to be disproven on this sort of perspective.
There are three things that every investor everywhere always will break down to. That are critical for what you need to do and why somebody would invest in your business and it's always these three they'll call them different things. But it's always these three. Right?
First. And foremost is, are you going after a big enough of an industry right? Like, if you're trying to win a twenty million dollar industry, nobody's gonna care if you're trying to win a twenty billion dollar industry. Okay. Somebody's gonna care. Right?
You need to just tell me that the space, and whatever you're trying to do or going after is gonna be big enough cut industries in ninety billion dollar industry that's growing at four to five percent every year for the last twenty years.
Like, okay, like, that's a big enough space. Okay, so that's number. One is a big enough number two is or what you are trying to solve with it.
Something that anyone cares about, like, so, is there actually a problem solution or is there kind of unique solution to a need? Or is it like, it has to be definable?
And the members on the other sides gotta get excited about it and look some people will, we'll get excited about something and some people won't. And that's just that's pure kinda taste or perspective on what they think the market is willing to do.
For example, we're big, basically stick up posters huge post it notes of your favorite sports are just stick on the wall. Trust me. My wife in particular was like, why would anyone ever buy one of these things?
Well, you know, but on the other end, like, it dependent on your audience, right? So again, first and foremost, is it a big enough market second? Does anyone care or people excited about it?
In the case of the example, like, people love showing off what they are sports fans of, and one, frankly, Robin and other people's faces, what sports fan they are mostly mail right sort of direction with it. So again, big market.
Is it something that somebody can get behind? That's it's going to solve and then third is, do you have the team.
To figure it out, because no matter what you put in your early models or everything else like, it's all BS.
Nobody has any idea what the model is it is definitively wrong from minute one, the investor needs to know. Okay. Do these people know how to navigate it? Is this going to require relationships? Is this going to require technical expertise?
Is this going to require exceptional marketing? Is this going to require fill in the blank and does the team that's behind it? Are they able to do that?
So again, three things always big enough interesting enough and the team to do it everything else is noise around that. So, put your pitch deck together with those three things are what you're doing what you're talking about.
It should follow that flow and you should make sure that at the end of the day, people walk away and get those three things. Because if they don't get those three things, everything else is a mess. So then so that's what the pitch deck is right?
That then you approach yet I think one of the things that, you know,
especially first time entrepreneurs try to do and especially if they start to get a little bit of traction,
their egos get ahead of themselves and they think they need to know everything.
The fact that matter is, you're likely pitching in a room to if they're sophisticated investors, they've seen a thousand pitch decks. They've seen it from every industry from every entrepreneur in every idea.
But nothing is generally very new. I mean, there aren't really unique ideas is how you're going about it or what what you're trying to create out of it. And so, if you walk into that meeting, you want to be confident about what you're doing, and be very sure about what you're doing.
Because trust me they're gonna throw lots of arrows actually, to try and knock you off of it. But on the other side, you you also should be humble, you should be in a position where, like, you know, I don't know the answer to that.
Let me get back to you want it or that's a great question. Let me work on that and come back with some thoughts versus trying to fumble through, or make up an answer.
Because if you do that, then the investor on the other side is gonna go that person in that team isn't capable of running this business. A long term, I'm not going to invest in them because they believe in what they don't know and that's dangerous for an investor.
So, just be very, very careful about that.
Right. That's actually a great point. I've heard the story of how investment fail like it was there basically a very final mean they were expecting a check already, and it was a wrap up basically, and after fifteen minutes.
So, you know, final questions from an investor, the investor was like, oh, sorry, I cannot invest. And the founder was just shocked, and he was like, okay, what what? And the investor said is just because you said, you never said, I did not know the answer for that.
So that happens. That's valid. That's really valid. Sometimes. Because because again, you need as an investor into this, as I looked at things as a, as an angel investor was right?
People need to be aware of what they don't know where of what they do know, but you have to have the humility to understand,
which is which,
because if you think,
then you're you're gonna run right off the edge of the cliff thinking that the cliff wasn't there, right that's that's and that's a really dangerous place for an investor.
Absolutely. That's a very valid point. Make sure to say, I do not know. That's okay. And I own it and that's totally fine. Right? I don't know. Let me get back to you, or that's a great question. I hadn't thought about that, but, let me put some thought to it.
Great. I make sure you follow up, right? Absolutely. And that's gonna give you a good reason to follow up with an investor and check in.
What's what their thoughts are on the company so very good point and we're moving on to the current situation. So, right now, is the does that make you enough? Everyone's a bit scared.
The investments are uncertain, more and more money or pure into later stage companies, and the early stage founders are seeing they're trying to figure out if they should just get a normal job.
And what's your recommendation to those early stage? Founders? What should they do? How can they still raise money if they feel that this is the time that they just want to start a company?
Maybe it's not necessarily the best time for them, but they still want to raise money. Right now. What's your recommendation to them?
Well, I, I think a couple things is that great companies that are going after great markets with a great solution with a great team are getting funded and we'll always get funded. It doesn't matter what the time is.
People say it's the recession about seven or eight. It's oh, it's the covet. It's whatever like, if, if if you have those three things, they will always get funded.
There's plenty of money for those teams, and those, those businesses every year of every decade. So.
Yeah, the folks who are not in that category who are struggling to get capital, I think, you know, on the one part, there are some very unique aspects of the current world right now.
Like, hey, if you want to create the next generation boutique hotel, you're probably gonna have a little bit harder time raising capital, or you're gonna create an airline. Right? I mean, that would be pretty bad to try and do in this world, right?
If you're going to open a, a restaurant in New York City, like, you know, caution right on what those things are. Right great.
So, there's some, very specific things that you kind of have to, you know, stay away from because the world just shutdown on those things.
But that's and the reality is that maybe ten, twenty percent of startups that are out there are are really ran into a oh, my goodness. You know, this, this is shut down. Yep.
And so you gotta move those off to the side and then talk about the other eighty percent, right?
On the other eighty percent is again, if you are, if if you have a good business, and you're going after the right category, you know, with a great team going about it, you'll get funded.
And the fact of the matter is sorry excuse me guess I'm caught my throat. The fact the matter is you will get funded.
And, you know, finding those people, you just have to be a little bit more resourceful of how do you get in contact with people? I think, frankly, it's an easier time than ever to get in contact with people because people aren't.
Traveling they aren't on vacation, they are in meetings they are waste. They aren't caught up. I can't reach him right now, because he's on a plane.
Well, that just isn't the case or I want to get, you know, you know, the, the founder, and get her to have a conversation with me. Like, those things aren't there.
So, you know, I think if if you're really struggling to raise capital, you know, those sorts of things, then I
would, frankly, like, you know, don't don't miss out on the point to look in the mirror and go. Am I is my idea and my business really that good.
Right that's very important. I'm personally not the biggest fan of, you know, self reflection and all that stuff, but in terms of starts, that's Super extra important. Sometimes when people do take this, look at the mirror, they're like, oh, gosh, that's in.
This part of my business is discussing and they're just gonna pivot and that's it. That's gonna work. So definitely. And you can pivot you can go somewhere else right?
You you have to make sure that you are all in, on what you're trying to create because if you don't then, you know, you're not gonna get there and, you know, the, the, the reflection on whether or not.
It's a good business. You have to look you have to ask yourself that all the time I'm ten months into metamorphosis and we've got some amazing stuff and we raised a whole bunch of capital and we've got some really great things that I've watched.
You've got great partnerships and, you know, well, not last night, but the night before woke up in the middle of the night thinking, this was a terrible idea. That's wrong. We've gone at it too fast.
We're, you know, we're just we're, we're smarter than we should be. We should have taken more time. We should've gone slower and then I wake up and get into the office and go. Yep we're crushing that. Let's keep going.
So, you know, it's not a bad thing to ask your question on your business of whether, or not, you're doing something good or whether it's a great idea.
But also, you gotta like we can get so caught up in our own echo chambers.
Right of what I'm doing is great. Isn't this amazing? Well, for the people around you keep saying it's amazing. Well, that's wonderful but if the world outside of the five people that you're around say it's amazing, that's not helpful, right?
Yeah, you need good friends, you need good advisors, you need good family to go. Well, that's really stupid.
Like, why are you doing that, like, that's never gonna work and, you know, nice constructive ways, but, yeah, you need the you need to have a check on reality. Right? And that's a good thing.
So, you definitely need validation there, but on this somewhat positive somewhat negative note, I think we're moving on to the last question of today's episode episode, which is a call to action.
So what's the one thing that you would like the listener to? As soon as the episode is over. Write down who their team is and that's a personal team. That's a professional team.
But who are the folks that are around them and do they have enough diversity of thought and experience, you know, around them to help make sure that they be great.
And I'm going, and you have to invest in that of who are the people that you turn to to help you work through things and one day it's a marketing challenge the other day.
It's a motivation challenge the next day. It's a financial challenge the next day. It's I need to find a new head of technology, right?
I mean, so do you have the team around you personal and professional to to succeed? That's actually
great advice. It should not is gonna take plenty of time.
Nevermind, but it's definitely worth taking that time, you know, to understand what football sorry when what kind of people can solve it and what kind of resources you can dedicate to this to those people to solve those problems. So, great advice.
Definitely take time on that. And, on my personal note, I'll say, go to fundraising radio dot com, and there is an acquisition part of it. So just go to these sections and go through acquisitions.
And there are plenty of great stories if you want to hear more about this. And also, I forgot to mention that we are creating our primary.
Custom channel, which is paid by the way and there is an article on the acquisition of school means. So if you're curious, I'm gonna leave a link to petri on. So you can check it out, sign up.
And that will definitely help us out in terms of, you know, growing our so, take your time, do your work and stay positive? So we'll wrap it up here. Thanks a lot for coming up.
And for sharing your knowledge, I think there was a great episode. A lot of, you know, a bit of emotional roller coaster versus happy. That is not that happy anymore. But that's how syrup life goes. So thanks a lot for sharing that.
Yeah, well happy to it's a tough slog to be an entrepreneur. People need to respect that. It's also the most amazing thing you'll ever do. It will also be the most difficult you ever do. Exactly.